Sebi presents operational guidelines for new FPI regulations
New Delhi, November 5 () Sebi markets regulator has issued consolidated operational guidelines for foreign portfolio investors and designated deposit participants to facilitate the implementation of the new FPI regulations.
The Foreign Portfolio Investor Regulations (FPI) became effective as of September 23.
Under the new rules, all insurance entities and funds in the FATF member countries have been classified as category I FPI.
Among others, unregulated funds or the entity in which the regulated investment manager is from a non-FATF country would be in category II.
To ensure the transition of existing IPF, NSDL would re-classify the registry in consultation with the respective designated depositary participants (DDP).
An FPI can search for the category II to I recategorization after providing the required information and the rates applicable to the DDP.
These consolidated operational guidelines for foreign portfolio investors and designated deposit participants are issued to facilitate the implementation of the Sebi Regulations (foreign portfolio investors), 2019, Sebi said.
In case the aggregate investment limit is violated, the FPI in question has to sell surplus holdings only to national investors, according to the guidelines.
Once the holding crosses the limit, depositors must inform the stock exchanges about the breach. In case of breach of the sector limit/FPI aggregate limit/NRI aggregate limit, foreign investors will divest their excess tenure within 5 business days from the date of settlement of the operations, selling shares only to national investors. said the regulator. RAM HRS